Judge Rules in Favor of Convention Center Tax Vote

Superior Court Judge Gonzalo denied the injunction request from the county’s hospitality and tourism workers union to block the vote on a special tax to fund the San Diego Convention Center expansion. The ruling issued on February 29, indicated that Unite Here Local 30 acted prematurely, and duplicated the city’s own plans.

“This lawsuit was unnecessary,” said City Attorney Jan Goldsmith. “If the tax is approved, the City will initiate validation proceedings and everyone, [including Unite Here] will have the right to be heard on the law in favor and against. That’s what the validation process is designed to do. It saves time and expense of multiple lawsuits and results in a judgment that is reliable.”

In January, the city council approved the creation of the Convention Center Facilities District (CCFD), an entity that would levy a tax on most of the city’s hotel properties. Current estimates predict that the revenue derived from the tax would generate $30 million annually for the convention center’s expansion costs.

The concerns over CCFD’s legality are that state law requires all taxes be approved by a two-thirds vote of the qualified electorate, and this tax would not be submitted to all voters, only to hotel property owners affected by it.

In an update on February 1, Goldsmith explained that the plan is not illegal, but rather it tests the law’s boundaries, and is something that has only been tried once by the city of San Jose. He added legitimate arguments existed on both sides, and that even lawyers within the city attorney’s office differed on opinions.

If hotel owners approve the tax, a validation proceeding will take place before any taxes are collected. Goldsmith admitted that the validation process may be expensive, but going forward with the financing plan is the policymakers’ call.

Deputy City Attorney Walter Chung, who defended the application for an injunction, elaborated on why delaying the validation proceedings is necessary. “It will be a better use of the City’s resources to allow the vote to happen. If the measure fails, then this lawsuit is moot,” Chung said.